All employees are entitled to some periods of paid sick leave per year of service. For example, In UAE employees may take a paid sick leave after their probation period with total sick leave not exceeding consecutive or non-consecutive 90 days per year of service and paid leave of 30 days. In other Gulf countries, the rules for sick leave payout differ.
A company may set more favorable than standard rules for sick leave pay for specific groups of employees.
In FirstBIT ERP, such rules are defined with Sick Leave Intervals and Sick Leave Types. Sick leave pay is calculated with the Sick Leave documents.
Sick Leave Intervals
Generally, the sick pay depends on how long a sick leave lasts and how many sick days in a year the employee takes. A set of successive sick leave intervals defines how sick pay decreases with the number of used days of sick leave. The days of sick leave within the first interval are paid fully, while if the sick leave duration exceeds the first interval, the applied percentage decreases with the interval. For example, typical intervals for the base sick leave type in UAE are: 1-15 (paid at %100), 16-30 (paid at 50%), and 31-90 (unpaid).
The total number of used sick leave days are tracked for each employee during this employee's current year of employment and is used to detect the corresponding sick leave interval when the employee takes another sick leave.
You can create Sick Leave Intervals using the the following form: HR and Payroll > See also > Sick Leave Intervals.
Sick Leave Intervals are created individually (not as a set) and used for defining sick leave types (for detail, refer to Adding a Sick Leave Interval). To the list of intervals, you can add all the intervals that will be used for different Sick Leave Types.
Sick Leave Types
In FirstBIT ERP, you can define a number of Sick Leave Types as master records using the following form: HR and Payroll > See also > Sick Leave Types.
Then, you can create all the Sick Leave Types that will be used in your organization. To define a Sick Leave Type, you need to specify a Sick Leave Accrual Type and select parameters for sick pay calculation.
For details, refer to Adding a Sick Leave Type.
Sick Leave Accrual Types
For each Sick Leave Type, you can create a Sick Leave Accrual Type, or you can use the same one for all sick leave types. For details, refer to Adding an Accrual or Deduction Type.
The Sick Leave Accrual Type for a specific Sick Leave Type should include all the accrual (earning) types that are used in Employment Contracts of the employees who are eligible for sick leaves of this type and that should be used for sick pay calculation when this sick leave type is used.
Parameters for Average Daily Earning Calculation
Generally, sick pay calculation is based on average daily earnings. For calculation of average daily earning, the following parameters are used:
- Accrued Earnings Type: defines how to accrue the earnings for averaging.
- Daily Earning Calculation Method: defines how to average the accrued earnings over days.
For accruing the earnings, there are the following options:
- Planned Earnings: The amount of planned earnings is the sum of an employee's current-month accruals according to the Sick Leave Type. Averaging period is 1 month (current month); the number of days to be used for averaging is selected as the calculation method.
- Actual Earnings: Calculations of average daily earnings will be based on actual earnings received by employee during the specified number of months. With this option selected, the Averaging Period field appears, and you can specify the number of months to be used for averaging.
In the Daily Earning Calculation Method field, you need to select the method of calculation:
- By Average Number of Days per Month: The amount of earnings (planned or actual) will be deleted by the average number of days per month, which is defined by the law. Notice that with this method selected, the first employment month will be not be included in any sick pay calculations if the employment start date is later than the 1-st day of the month. Also, you need to specify the number to be used as the Average Number of Days per Month in the corresponding field that appears if this method is selected.
- By Number of Calendar Days: The amount of earnings (planned or actual) will be deleted by the number of calendar days in the specified averaging period.
- By Number of Working Days: The amount of earnings (planned or actual) will be deleted by the number of working days in the specified averaging period.
Leave Requests for Sick Leaves
Documents of the Sick Leave Request type are created when an employee requests a leave of absence due to illness. To view or register such requests, you can use the following form: HR and Payroll > Time Tracking Documents > Leave Requests.
Documents of this type are available if the Enable Leave Requests option is selected on the Administration > Settings > HR and Payroll form.
Employees can create Leave Requests (with Sick Leave as leave type and specify an appropriate Sick Leave Type) for themselves if they have appropriate access rights. They can specify the dates of the sick leave, attach scans of appropriate paper documents, and post the requests. For more details, refer to Creating a Leave Request.
Sick Leave Calculation
Documents of the Sick Leave type are created based on Leave Requests (with Sick Leave as the leave type) or manually using the following form: HR and Payroll > Time Tracking Documents > Sick Leaves.
For the employee, you need to specify the start and end days of the sick leave. For each new sick leave, the program checks how many sick days were used by this employee (during the employee's current year of service) and calculates which sick leave interval or intervals the new sick leave matches. When you click the Calculate button, the program calculates the sick pay according to the rates associated with sick leave intervals covered by the sick leave.
Example: Ali was hired on May 1 of 2018 by a company in the UAE. His salary is 1800 AED. When Ali takes10 days of sick leave in October 2018, he is paid fully. Ali's average daily salary is 60 AED if sick pay calculation is based on Planned Earnings.
The sick pay will be:
600=10*60
At the moment of the second sick leave, which happened in the same year of service, Ali has 10 days of sick leave used and requested another 8 days of sick leave in February. From his requested 8 days of sick leave, 5 days are paid fully because they are still in the first interval (1-15), while 3 days are paid at 50% because they fell into the second interval (16-30).
This time, the sick pay will be calculated as follows:
5*1*60 + 3*0.5*60 = 390
Note. With start of each new year of service of an employee, the number of sick days used by the employee is reset to 0. If a sick leave is taken at the end of the current year of service and extends in the next year, the rates from the current year applied, and the number of used days will be reset to 0 after the sick leave is posted. For example, John takes the third sick leave (starting April 28) at the brink of his next year of employment which starts on May 1st. With 18 days of sick leave used in the current year, his 5 days of illness will be paid at rate of 50%.
The posted Sick Leave documents will reflect the corresponding leave of absence days in Time Sheets if you select to populate the time sheet by using the Fill by All Documents option.
Once the Sick Leave document is posted, you can generate a Payroll Sheet for it and then create a payment to the employee by cheque, cash, or bank payment (a deposit to the employee's bank account). To provide the details of calculation to the employee, you can use the following report: HR and Payroll > Reports > Payslip.